Naira closes week flat across markets as CBN injects $210m

The foreign exchange market observed the five days trading session with Naira closing flat across markets helped by the $210 million injected by the Central Bank of Nigeria (CBN) within the week.

Naira closed steady at N411.67k per dollar, which was also the opening rate at the Investors and Exporters (I&E) forex window.

On Monday local currency lost 0.16 percent to close at N411.67k from N411.00k on Friday at the I&E window.

On Tuesday, naira gained 0.40 percent as the dollar was quoted at N410.00 against N411.67k quoted on Monday at the Nigerian Autonomous Foreign Exchange (NAFEX), data from the FMDQ said.

Naira on Wednesday weakened by 0.36 percent as the dollar closed at N411.50k compared to N410.00k closed on Tuesday at the same market.

On Thursday, Naira/dollar exchange rate depreciated marginally by 0.04 percent or N0.17k to close at N411.67k$ from N411.50k quoted on Wednesday. Naira closed steady on Friday at the official window.

The foreign exchange market daily turnover increased by 21.62 percent to $114.53 million at the end of the week on Friday from $94.17 million recorded at the opening trading day on Monday.

Week-on-week, the turnover declined by 34.94 percentage points from 56.56 percent last week to 21.62 percent this week.

A breakdown of the CBN’s intervention showed that USD100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles.

Naira also closed the week flat at N500/$ at the parallel market popularly called the black market.

At the Bureau De Change (BDC) segment of the foreign exchange market, Naira weakened by 1.02 percent to close at N495 per dollar from the opening rate of N490/$ on Monday.

In the futures market Naira/USD exchange rate depreciated for all of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months exchange rates rose by 0.33 percent, 0.22 percent, 0.36 percent, 0.53 percent and 1.14 percent to close at N413.10/USD, N415.07/USD, N417.16/USD, N422.19/USD and N433.54/USD respectively. Meanwhile, the spot rate remained flat at N379.00/USD.

“We expect Naira/USD to stabilize at most FX Windows as crude oil prices continue to trade high at the international market,” analysts at Cowry Asset Management Limited said.

The CBN had instructed all banks to make sure there is the availability of FX at all times for anybody who want to buy Business Travel Allowance (BTA), Personal Travel Allowance (PTA), medical fees, student school fees and all the eligible invisible purchases, to ensure that Nigerians are not forced to go and use the parallel market.

“What we have been instructed to do is to ensure that we do not turn anybody back and that we should request from the CBN once we exhaust the stock we have. So this very good news and the idea is to have a hitch-free summer period and resumption of schools for children to go back to school. So the idea is to ensure that there is less pressure on the FX and then the rates will come down,” Nneka Onyeali-Ikpe, managing director/CEO, Fidelity Bank Plc said at the last bankers’ committee.